Bank of India Launches Dedicated Value Fund, Targeting Long-Term Capital Appreciation Through Undervalued Stocks

Bank of India Launches Dedicated Value Fund, Targeting Long-Term Capital Appreciation Through Undervalued Stocks​

Bank of India Mutual Fund has officially launched the Bank of India Value Fund, an open-ended equity scheme dedicated to following a disciplined value investment strategy. This new fund is designed for investors seeking long-term capital appreciation by identifying and investing in stocks that trade significantly below their intrinsic worth. The fund aims to provide consistent growth prospects through fundamental analysis and rigorous portfolio management.

Strategic Focus on Value Investment​

The core objective of the Bank of India Value Fund is generating substantial, long-term returns. This goal is pursued by predominantly investing in equity and equity-related instruments that align with a value investment methodology. The strategy mandates a bottom-up stock selection approach, focusing on companies that possess sound corporate management and exhibit strong prospects for sustained profit growth.

The fund will maintain a conservative yet aggressive portfolio structure. Indicatively, the scheme intends to allocate between 80% and 100% of its assets into value equity and related instruments. A portion, ranging from 0% to 20%, may be allocated to non-value equity or other liquid instruments, including money market instruments, Gold/Silver ETFs, and units of InvITs.

Financial Structure and Risk Profile​

The fund's performance will be measured against the Nifty 500 Total Return Index (TRI), which serves as the primary first-tier benchmark. This choice is justified by the index’s representation of over 95% of the free float market capitalization on NSE, aligning closely with the indicative universe of the portfolio. The scheme carries a Moderate to Moderately High Risk rating based on internal assessment and scheme characteristics.

The fund offers various investment flexibility through different plans, including Direct Plan and Regular Plan. For continuous offerings, units are available at NAV-based prices. During the New Fund Offer (NFO) period, the introductory price for units is set at Rs. 10 per unit for cash payments. The scheme mandates a minimum application amount of Rs. 5,000 during NFO and on a continuous basis.

Operational Guidelines and Investor Protection​

The Scheme provides investors with specific protections regarding capital preservation and transaction costs. Importantly, the fund has zero entry load structure. When redemption or switch-out occurs within three months from the allotment date, an exit load applies: Nil for 10% of the investment and 1% for the remaining portion.

Operational transparency is a high priority. The AMC will calculate and disclose the Net Asset Value (NAV) daily, with the first NAV being calculated no later than five business days after unit allotment during the NFO. All transactions are subject to SEBI guidelines, ensuring that the scheme maintains compliance across all regulatory requirements.

Leadership and Investment Scope​

The fund is managed by Mr. Nav Bhardwaj, a 41-year-old professional holding a PhD in Business Management (Finance). He brings approximately 17 years of diverse experience spanning equity research, derivative trading, and fund management. The fund’s investment scope is broad, allowing for investments across listed and unlisted securities—including public offerings, secondary market purchases, private placements, and negotiated deals.

The Scheme permits the use of sophisticated financial tools such as derivatives for hedging and portfolio balancing. Strategies available include Index Arbitrage and Covered Call Strategy. This strategic utilization is done within strict regulatory limits and ensures that investment decisions are executed on exchange-traded platforms with guaranteed settlement.

Key Investment Risks Defined​

As is standard in equity investing, the fund carries inherent risks across multiple domains. Equity investments introduce risk related to price volatility, market movements, and the liquidity of unlisted securities. The debt and money market allocations carry specific risks such as interest rate fluctuation, credit risk associated with the issuer, and reinvestment risk.

Risk mitigation is integrated into the investment process. For example, concentration risk—the possibility of loss due to heavy exposure in a few sectors or issuers—is managed by mandating high diversification across various securities and issuers. The fund's operational controls are designed to proactively monitor and mitigate these risks at the portfolio construction stage.